History Of Sports Betting In The USA

The history of sports betting in the USA begins near the turn of the 19th century, though we know that the activity has been taking place for thousands of years around the world. Competition and mankind go hand in hand, as does the spectacle of watching and the ensuing bets. Wagering on an event allows the spectator to become an active participant of the event without being the actual contestant. Sports betting has evolved drastically throughout the centuries, with various cultures around the world putting their own spin on sports gambling. What began with betting on garments and chariot races has now developed into a multi billion dollar industry that influences millions of Americans each year.

The US history of legal sports betting is one with many twists and turns, as the popular form of gambling has fallen out of favor during certain time periods. The legality and commercialization of sports betting have often been challenged, but the industry still continues to grow today with advancements in technology and consumer demands. Betting on sports has perhaps been around as long as sports themselves, and it is doubtful that America will ever give up one of its oldest pastimes. Before discussing the future of wagering on sports, it is important to know the history of sports betting in the USA.

History Of Sports Betting Before The 20th Century In The USA

In the early 19th century, betting on horses was the most popular sport amongst gamblers. Though horse racing betting today involves pari-mutuel pools, horses played a role in developing the history of sports betting in the USA. It was with the establishment of professional baseball in 1876 that traditional sports betting came to the forefront. The National League was founded on February 2, 1876, followed by the American League in 1901. By 1877, however, the game started being influenced by gambling as years later it was found that the Louisville Grays were throwing games. During this time the general attitude toward sports betting was laxer than throughout any other point in history, with the activity being viewed purely as a form of entertainment. There were even baseball pool cards which are similar to the parlay cards found in DE and other sportsbooks today. An article from the Washington Post in 1894 stated the following about the then-manager of the Chicago Colts:

“Uncle Anson has already started making wagers on the position the Chicago Colts will have in the race for the National League Pennant next year. He put up $100 a few days ago that his team would finish higher up in the race than the Pittsburgh Pirates.”

This goes to show how acceptable betting on sports was during the era, as in current times a manager would never be able to bet on his team. It was not until 25 years later that the first major sports betting scandal occurred. Eight players on the Chicago White Sox were bribed into throwing the 1919 World Series, casting a dark shadow over sports betting that is still felt today. Regardless, sports betting continued to grow in the US with even more sports coming into the fold. The 1920’s are often referred to the ‘Golden Era’ of sports, with collegiate football and basketball becoming popular sports betting options. During the Great Depression, football pool cards were in high demand due to the perception of quick, instant cash. For the most part, the odds were greatly in the favor of the bookies.

Though sports betting was prevalent, it is important to note that up until this point sports betting was actually illegal. However, with no real sports betting laws and a lack of attention from law enforcement, the activity became commonplace. It was in 1931 that Nevada legalized gambling, though betting on sports was not big business in the state until the 1970’s. It was during this time that Congress lowered the 10% tax on sports bets that bookmakers were required to pay. Within a few years, more states moved toward legalizing sports betting. In 1976 Delaware began their sports lottery, and the Oregon Sports Action parlay game came in 1989. The Montana Lottery was created by voter referendum in 1986, with limited sports pools and fantasy sports betting options.

As more states started to consider legalizing sports betting, the more concerned Congress grew. This prompted the government to find a legal means to stop the proliferation of sports betting across America. To achieve this, lawmakers wrote and enacted the Professional and Amateur Sports Protection Act of 1992 (PASPA). PASPA banned sports betting in the United States, except for in the four states that had already established legal sports betting operations. Of all the moments throughout the history of sports betting in the USA, the passage of PASPA had the biggest impact on the overall betting landscape.

History Of Las Vegas Sports Betting

Las Vegas opened it’s first official sportsbook (called turf clubs at the time) and started accepting wagers in 1949 and have been doing so ever since. However, there was plenty of illegal sports betting going on in the city before then. Las Vegas is single handedly responsible for making sports betting so popular in the USA and the world. Another fact about the history of sports betting is the fact that the Juice started in Vegas. When they first opened a sportsbook there was an agreement with the casino that the book would pay 10% of their earnings to the casino. The sportsbooks way of making up for this money was to charge a vig on any bet that is placed, and that is why you have to pay juice.

History Of Modern Sports Betting In The USA

When you fast forward to the 21st century, sports betting in the US looks dramatically different than it did centuries prior. Sports bettors are able to bet on every sport imaginable, from football and basketball to tennis and golf. The point spread was introduced more than 50 years ago, but there are now a variety of straight and exotic wagers that bettors have become accustomed to. The advent of the internet also changed how sports fans could wager and also made betting on sports more accessible. With Nevada being the only state offering single-game wagering, sports enthusiasts had very limited options when it came to safely placing bets. In the early 2000’s, online sportsbooks began appearing all over the US market and became the norm for betting on sports. No matter where a bettor was located, they would be able to find Vegas-style sports betting action from the comfort of their home.

Just as the spread of sports betting signaled the US government to step in and stop expansion, the same incident occurred as online sports betting increased in popularity. In 2006, the Unlawful Internet Gambling Enforcement Act of 2006 (UIGEA) was stealthy included as part of the larger SAFE Port Act. The SAFE Port Act was concerned with port security, making the UIGEA a completely unrelated law in the grand scheme. Signed into law on October 13, 2006, by then-President George W. Bush, the UIGEA is an act that prevents certain payment instruments from being used for online gambling transactions. The FDIC requires certain U.S. financial institutions to monitor and restrict certain designated payment systems that include credit cards, checks, and wire transfers. Though the law does not make online sports betting illegal, nor does it punish bettors in any way, the UIGEA did cause many online sports betting sites to leave the US market.

With the federal sports betting laws in place, you will not find online sportsbooks that operate from the United States. Still, there are plenty of sports betting sites that safely serve USA sports bettors. All of the sites are based offshore, in locations like Antigua, Costa Rica, and Panama where remote gaming is legal. These sites are licensed and regulated to accept US players even without being physically located in the states. There are only a few states in the nation that penalize residents for betting on sports online, including Louisiana, Washington, and Utah. Aside from these select few states, sports fans all across the nation use offshore sports betting sites to bet on sporting events every day.

The restrictions on sports betting may soon be coming to an end in the US. With New Jersey fighting to have PASPA ruled unconstitutional, plus the numerous other states that have introduced sports betting bills, change is inevitably on the horizon. Though the history of sports betting in the USA has been eventful thus far, there is still more to come in the future.